Fair value of assets and liabilities |
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| Fair value of assets and liabilities | 3. Fair value of assets and liabilities Financial Instruments Recorded at Fair Value on a Recurring Basis The following tables present the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:
Financial guarantee derivative The following tables summarize the notional amount and total fair value of financial guarantee derivatives as of December 31, 2024 and 2025. The maturity profile of the derivatives is generally within one year. While the notional amounts disclosed below give an indication of the volume of the Group’s derivatives activity, the notional amounts significantly exceed, in the Group’s view, the possible losses that could arise from such transactions. The notional amount is simply a reference amount used to calculate payments. The maximum payout is subject to pre - agreed cap.
The following table summarizes the activities related to fair value of the financial guarantee derivatives for the years ended December 31, 2023, 2024 and 2025, respectively.
Financial investments Financial investments measured at fair value consist of the investments in VC funds, which are open-ended funds with most underlying investments measured at fair value, and various other financial instruments, including U.S. Treasury securities, wealth management products with no fixed term and fund-linked notes, whose fair value are provided by custodian banks and financial institutions. The Group used the statements directly obtained from third – parties without adjustment with assessed fair value of the financial investments. Due to the use of significant unobservable inputs, these investments are categorized in the level 3 valuation hierarchy. Financial Instruments Not Recorded at Fair Value The Group’s financial instruments not recorded at fair value including cash and cash equivalents, accounts receivable and contract assets, financial investments at amortization cost, payable to investors and institutional funding partners at amortized cost, other payable and short-term borrowings. The carrying values of these financial assets and liabilities approximate their fair value reported in the consolidated balance sheets due to the short-term nature. |
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